captioning sponsored by wpbt >> susie: a new legal thriller: the justice department throws the book at apple. it's suing the tech giant, alleging apple conspired with publishers on e-book prices. >> tom: then, wall street turns the tide on a five-day losing streak. behind today's stock buying: an upbeat take on the economy from the federal reserve and strong earnings. it's "nightly business report" for wednesday, april 11. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

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>> susie: good evening, everyone. stocks on wall street bounced back today, ending a five-day losing streak. and we'll have more on that in just a moment. but first, tom, apple was one stock everyone was talking about, but not necessarily in a complimentary way. investors were surprised the justice department filed a lawsuit against the company. >> tom: yes, investors think of apple as the darling stock that can do no wrong, susie. but this antitrust lawsuit accuses apple and five major book publishers of conspiring to fix the price of electronic books to limit competition. as darren gersh reports, it's an important case here for the

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development of e-commerce. >> reporter: for a lawsuit, it's a page-turner. the justice department says one publishing company c.e.o. bemoaned the "wretched 9-9-9 price point" amazon charged for e-books. that competition, the department says, convinced publishers to team up with apple at secret meetings to develop what one publishing company c.e.o. called "project z." >> during regular, near quarterly meetings, we allege that publishing company executives discussed confidential business and competitive matters, including amazon's e-book retailing practices, as part of a conspiracy to raise, fix and stabilize retail prices. >> reporter: apple emerges in the lawsuit as a kind of cartel leader. the government's lawsuit says the company pushed to seize pricing power from bookstores, and it quotes former c.e.o. steve jobs telling publishers it was time for a new model. "you set the price," jobs told publishers, "and we get our 30%. and, yes, the customer pays a

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little more, but that's what you want anyway." apple declined our request for comment. simon and schuster, hachette and harpercollins settled with the justice department, but macmillan is fighting back. c.e.o. john sargent said changing the pricing model for e-books was the loneliest decision he ever made, adding he made it during a 4:00 a.m. workout in his basement. he called the settlement offer the justice department made "onerous." "after careful consideration, we came to the conclusion that the terms could have allowed amazon to recover the monopoly position it had been building." >> reporter: the justice department gives this plot a different twist. it says it's sending a message to the e-commerce marketplace that it won't tolerate plans to strangle new forms of competition, and the hero here appears to be amazon. >> they were the disruptive force in the market, and certainly publishers and apple did not like that. and the scheme here seems to have been directed at preventing

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those forms of competition from really flourishing. >> reporter: the justice department says the publishing conspiracy cost e-book readers tens of millions of dollars. that's a rounding error from apple, which is sitting on billions in cash. but government lawyers say this case is about protecting cutting edge innovation from cutthroat competition. darren gersh, "nightly business report," washington. >> susie: as we mentioned, stocks staged a sharp u-turn, recovering from yesterday's big sell-off. fueling the rally, reaction to alcoa's positive earnings surprise we told you about last night. but today, some encouraging news from the federal reserve: its latest beige book survey of economic conditions showed the economy continues to expand at a "modest" to "moderate" pace. the fed also said consumer spending is "encouraging" despite concerns about gas prices. and hiring is "improving" in many regions. investors interpreted all that as a positive. the dow rose 89 points, the nasdaq added 25, and the s&p up

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ten. so what's next for the markets? john manley says he's "bullish" and a "buyer." he's chief equity strategist at wells fargo advantage funds hi, john. >> hi, susie. >> susie: first i want to apologize for the music in the back ground, there's an event going on, i guess they're in a good mood about what happened in the markets today, but we apologize for that. let me begin by saying what changed between yesterday's selloff and today? what's going on here? >> well, two things. first of all, we had alcoa come in with thaerngs were pretty good at the top and bottom, and encouraging the outlook. but the beige book also was a factor. still haven't want -- banished all questions about the growth. but it was better rather than worse news, and after five bad days that was enough to loosen up. >> susie: you've been saying there will be some correction

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in the market, but a small one. tell us about that. >> markets still have a little more work to do, the problems art fixed. it's not better in the sense that it's completed healed, but things are getting better. and more importantly, we know what the problems are. i think this year and probably last year before it were literally bouncing a lng the bottom. valuations were low, expectations were low, cynicism was high. i don't know what drives this over the very short term, but do i have confidence in the next couple years. >> susie: well, for right now, a lot of the focus is on the quarterly earnings coming out. we already talked about alcoa and that positive surprise. we have some other numbers coming from google, j. p. morgan. what is the key thing that investors should be looking for and listening to as these numbers are going could be coming out over the next couple weeks? >> i think you should be listening to the outlook, what are the companies saying about their future. this quarter and the next are not expected to be great, so they're fairly low hurdle rates.

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i think the real issue will be what happens in the second half of the year when wall street is expecting stronger numbers. we want to get some sense, our corporations seeing something still drop to the bottom line, is the top line safe? corporate profits are high, people are worried, we want some reassurance for the next 6 to 12 months. >> susie: you mentioned a moment ago about the beige book. tell me more what's your take on what the fed was saying, and was there anything in that report that investors should key on, that stand out? >> i think the general tone of the book was pretty positive. the fed doesn't want to create a sense of euphoria because it wants to hold back, probably wants to keep interest rate low for a while because of issues with housing. but the news is basically good, it's better rather than worse, the economy is showing some strength. manufacturing is reasonably good. of course there's the concern about liver oil prices, but they have drifted lower in the last few weeks, so that probably ameal yor it's a somewhat. basically it's as good as we

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could have hoped for, slow and steady wins the race. >> susie: some analysts were saying that after the beige book came out because it was so positive, that those markets, the stock arranges started to pull back a little, they had been stronger, and the feeling was that the market is doing so well the fed won't have to intervene. what's your take on that? >> i think it's kind of perverse, but we're perverse on waz from time to time. i think the most important message from the fed is that they're there if we need them. if things have to be done they're not going to allow things to go bad, they're going to protect the economy and that i think puts some kind of floor under stocks, because it, will it boost them in the short term is anybody's guess. but the fed wants you to take risk and the fed is going to maintain things as best they can. so i don't worry about this perverseity, i think the fed is here if we need them. >> susie: all right, we'll leave it there. john, thanks so much.

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and we've been speaking with john manley at wells fargo advantage funds. >> tom: still ahead, natural gas prices hit their lowest level in almost a decade. "street critique" guest bryan perry weighs in on whether now is the time to buy. well, here we are at the start of another earnings season, but, as we've reported, results are likely to be unimpressive. most forecasting firms are betting overall corporate profits will not show much growth, if any. erika miller digs deeper, looking at which industries are likely to post the biggest declines. >> reporter: profits have been soaring on wall street, but those high-flying days are over for now. seven out of the ten major stock sectors are expected to report a drop in first-quarter profits. >> i think that has to do with much more difficult comparisons because the first quarter of 2011 we were up 20%. also, we find that the price of oil is up close to 4% to 5% on average. and also the value of the dollar

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is higher. and since most of the companies in the s&p are multinationals, they'll be impacted negatively by a higher dollar. >> reporter: basic materials is expected to be the worst performing sector, with a more than 14% decline in earnings compared to a year ago. the recession in europe and a softening economy in china have diminished demand for raw materials. despite the grim outlook for materials, alcoa reported better than expected first quarter numbers yesterday. the world's largest producer of aluminum surprised wall street with a profit instead of a loss. analyst bridget freas is optimistic conditions will continue to improve. >> i don't think there's a lot of room for aluminum prices to move lower than where they are now, given that probably a third of aluminum producers out there aren't going to be making a profit at current pricing levels. so, under that assumption, i actually think the first quarter could be the weakest quarter of the year. i think the year could trend up. >> reporter: telecommunications services is expected to be the

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second worst sector, down almost 13%. broadband competition is heating up. in addition, consumers are gravitating to wireless service and away from old-fashioned wire lines. and finally, you can blame mother nature if utilities earnings are down an expected 5% for the first quarter. a warmer than usual winter hurt energy demand in many parts of the country. but here's some good news: although profit growth is likely to be flat in the first quarter, the rest of the year is expected to be much better. wall street analysts are forecasting earnings growth of 7% in the second quarter, in line with the long-term average. erika miller, "nightly business report."

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>> susie: now that rick santorum has pulled out of the presidential race, it looks like mitt romney will be the republican candidate battling president obama for votes in november. but the two campaigns aren't just fighting for votes, they're also fighting for campaign donations. and this year is panning out to be a complicated one for fundraising. >> reporter: mitt romney today effectively declared an end to the bloody republican primary battle. experts say his first challenge is getting rick santorum's donors behind him. >> for some of the smaller donors who liked santorum for idealogical reasons, because they saw him as more of the "conservative" conservative, i don't think they'll be switching to romney immediately. >> reporter: viveca novak tracks campaign donations and says small contributions add up. and they're very important to romney's foe, president obama. nearly half of the donations to his re-election campaign have been $200 or less.

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but with the rise of big political action committees known as super pacs, those small donors may not be as important as they used to be. so far, romney is winning the super pac war. "restore our future," the super pac backing romney, has raised $43 million, and the republican- leaning "american crossroads" has raised almost $27 million. so far, it's hardly spent any of that cash. meanwhile, the super pac backing the president, "priorities u.s.a.," has raised only $6.5 million. >> i'm sure there will be other super pacs spending on behalf of obama, but it remains to be seen who they will be and whether they'll be able to raise enough real money. >> reporter: the other unknown: what campaigns fueled by super pac dollars will look like once the general election heats up. >> you'll have the possibility, of super pac ad wars turning up the last weeks of the campaign, financed with millions of dollars, overwhelming the

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campaign the candidate or the party was trying to run itself. >> reporter: sylvia hall, "nightly business report," washington. >> susie: another setback for johnson and johnson: the health care giant has been ordered to pay $1.1 billion to arkansas for violating the state's consumer protection laws. arkansas sued johnson and johnson, claiming the company promoted its anti-psychotic drug risperdal for uses not approved by the food and drug administration. johnson and johnson called the ruling "disappointing" and said it will appeal. south carolina, texas and louisiana have all filed similar suits, and johnson and johnson has an agreement in principle with the justice department over marketing practices tied to the

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drug. johnson and johnson shares closed down a few pennies, tom-- $64.13 at the close. shares have struggled recently as the company has been dealing with multiple recalls of its over-the-counter drugs. >> tom: year to date low for the share price here tonight as we speak, susie n. the meantime, it was the first time in a week that we had the major stock indices seeing more buying than selling, ending that five-session slide. it wasn't full-throated buying, though. the s&p 500 hit its best level of the day about an hour into trading. the index finished up 0.75%. leading today's charge inside the dow industrials was alcoa. it helped improve investor sentiment after reporting that surprise profit in the first quarter, as we reported on last night. shares popped more than 6% on heavy volume. even with today's relief rally, though, alcoa still trades lower than where it was at the beginning of this month. and even though alcoa's profit

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was a relief, the financial stocks led the market higher today. the s&p financial sector rebounded more than 1.5%. that was closely followed by consumer discretionary stocks and telecommunications. each of those sectors were up 1.3%. bank of america led the financial sector, up almost 4%. but even though it was one of the most actively traded stocks, volume was a bit lighter than average today. a couple of other banking stocks to watch in the days ahead: j.p. morgan and wells fargo. both are due out with earnings friday morning. j.p. morgan rebounded about 2.5%. wells fargo regained 2% from its recent sell-off. the once king of the cellphone continues struggling. nokia has been hurt by competitors in the u.s. and europe, and now it warned about more competition hurting its business in emerging markets like india, the mid-east and china. u.s. shares of nokia fell hard, down 16%. volume was huge, almost 200 million shares as the stock sits at a 15-year low. nokia said its phone business will lose money in the first two quarters this year. also, it's answer to apple's

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iphone, called the lumia 900, has a software bug. among the stocks seeing a snap back today were home builders. these stocks saw some stiff selling over the previous few sessions, but they snapped back today. pulte group was up 9%, lennar regained 5%, and d.r. horton was up almost 5%. a survey of 20 major markets found the strongest sales rates by homebuilding managers in more than a decade. meantime, paint maker sherwin- williams put up some green today: shares up 5% to a new all-time high. late yesterday, sherwin raised its outlook for the first quarter thanks to strong retail paint sales. owens-illinois isn't exactly a household name, but its products may be in your house. it makes glass containers for food, beer, juice and other items. a very bullish outlook sent shares up. its almost 7% gain brings shares

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back to the top of the range they've been in this year. cost cutting, less money spent on software licensing, and better than expected production add up to a much stronger than anticipated first quarter. the results are expected in two weeks, but shares were moving today. online travel site travel-zoo has taken investors on a bumpy ride. today, at least, the direction was up. after falling more than 70% over the past year, the stock shot up more than 28% today. media reports indicate the web site may put itself up for sale. reuters reports it already has attracted buyout interest and is looking to hire financial advisors. a series of disappointing earnings reports has weighed on the stock for months. and that's tonight's "market focus."

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>> tom: energy prices have cooled off and housing remains weak, yet tonight's "street critique" guest is buying both. bryan perry is the editor of the high yield investment news- letter "cash machine." bryan, energy prices are a little cooler, home has yet to take off. so why get into these sectors? >> well, we've seen energy prices pull back the last couple weeks, mainly due to concerns about china cooling off. we had a big build in inventories in the u.s., and iran is coming to the negotiating table. so we've had almost a 10% correction in the price of crude. and it has allowed investors to take a very good very point, i believe, and some of these oil and gas. >> tom: sct, the ticker symbol is your oil play, it gets royalties from natural gas wells and oil wells in oklahoma. close to $30, a big yield. what do you anticipate? >> well, it's down from 37, it

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came out of the gate pretty fast and pays about a 10.6% yield here. the company has beat their quarterly projections three quarters in a row since going public about a year ago. so they've been able to beat the street, and at the same time i'm bullish on oil for the long term. >> tom: powerful combination. natural gas, put it up on the board here, had a decade low, below $2, an amazing drop. we had a viewer question here in regards to that, asking how do i purchase stock in liquid natural gas, liquified natural gas of course is the way to really export it and ship it overseas. your play here is lng, the ticker symbol. what makes you like lng? >> it is a counterintuitive trade. if you can freeze gas down to 600 times, in liquid form from its gasous state and ship it, that's a pretty good proposition, and lng operate the terminal paths off of

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houston which is about the only player right now. they completely sold out their first phase for exports for the next 20 years. and we'll build another terminal here over the next five years so, the company is extremely well placed and has pulled back off its highs as well. >> tom: i want to mention your housing play, pmt, the penny mack mortgage, a real estate investment trust invested in residential mortgages. are are playing with fire? >> the nonconforming market is starting to turn up and the hedge fund managers are starting to buy into this because they got the wind at their back with the economy improving and government stimulus to make sure that's a fortified asset class, a big yield, almost 12%. >> tom: do you own everything we mentioned tonight? >> i try to, yes. >> tom: cash machine's bryan perry. >> susie: an explosion today at a g.m. testing facility, raising new questions about the safety of the lithium ion batteries

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used in hybrid vehicles. one employee at g.m.'s warren, michigan, research facility was injured and taken to a nearby hospital. the battery being tested is being developed for new all- electric cars, including the upcoming spark compact. g.m. notes a different kind of lithium ion battery is used in its battery-powered volt. that vehicle was investigated for potential battery fires and cleared as safe earlier this year. >> tom: in the "money file" tonight, new insights on the difference between men and women, and our credit cards. here's gerri walsh, president of the financial industry regulatory authority's investor education foundation. >> the finra foundation surveyed over 28,000 americans and found that women were more likely than men to engage in costly credit card behaviors like making only the minimum payment and incurring late fees. even after adjusting for income and education, women are 10% more likely than men to make these costly mistakes, and women

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pay more than half a point higher interest rates on their cards. that's real money. over the long-term, paying half a point more can increase borrowing costs by thousands of dollars. we women need to ask ourselves why we're falling behind when it comes to managing our credit cards. the good news is that increasing financial literacy might help improve credit card behavior and eliminate those gender-based differences. when we compared men and women with high levels of financial literacy, we found no differences in credit card behavior. financial literacy appears to level the playing field, and that's a good lesson for all of us to keep in mind during financial literacy month. i'm gerri walsh. >> susie: tomorrow, earnings season roles on. google takes the spotlight, releasing its first quarter numbers after the market close. we'll see if "google plus" is adding to the web giant's bottom line. >> tom: finally, if you're a hockey fan, comcast's nbc wants to give you the stanley cup experience.

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the new nbc sports network is celebrating the start of the n.h.l. post-season by giving you the chance to drink from lord stanley's cup. its a 21-foot replica of the stanley cup unveiled in times square today, and, just in time for warmer weather, it doubles as a working water fountain. nbc's new sports channel takes aim at the reigning kind of cable sports, disney's espn. here's tonight's "beyond the scoreboard" with rick horrow. >> reporter: a year ago, disney's espn was the unchallenged king of cable sports television. but with billions of dollars at stake, new competitors are entering the field. comcast's nbc sports network is up and running, and fox sports is considering its own 24-hour national sports network. but disney's crown jewel is not in jeopardy. the only way to draw loyal viewers to a sports cable network is with live sports rights, and espn's roster is impressive.

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monday night football, college football bowl championship series, n.b.a. playoffs and nascar are just some of them. comcast's newly re-branded sports network has the olympics and the n.h.l.-- not much of a competitor yet. the reality is espn has an insurmountable advantage in its revenue streams. it generates $4.69 per month per cable subscriber for disney. the new comcast network brings in just 31 cents per monthly subscriber. if the goal is to compete with espn, industry experts say nbc- u-comcast might have to spend $20 billion out of its pocket on rights alone. that's a strategy that should scare some comcast stockholders. i'm rick horrow. >> tom: that's "nightly business report" for wednesday, april 11. i'm tom hudson. good night, everyone. and good night to you, too, susie. >> susie: good night, tom. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by:

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